Airbus Shares Downgraded By Citi as Currency Exposure Weighs

Airbus SE (AIR), the European aerospace giant, finds itself navigating a period of turbulence as an analyst downgrades and persistent supply chain constraints cast a shadow over its near-term prospects. Airbus shares are trading down 1.9% today having once again hit resistance when trying to move above €170.

While the company maintains a dominant position in the global aircraft market and enjoys robust demand for its products, significant operational challenges are impacting its stock performance and investor sentiment.

Today, Citi downgraded Airbus to Neutral citing the company's exposure to Euro and Dollar transactions, noting that any weakening of the dollar reduces Airbus fair value by about 3-3.5 euros per share. They cut the price target from €209 to €183 as sales in USD, and costs in EUR are seen to weigh on the firm.

Earlier downgrades in recent months were more reflective of the growing concerns about Airbus's ability to meet its delivery targets amid persistent supply chain disruptions. Engine supplies, in particular, have been a bottleneck. While CFM International agreed to redirect some engines to Airbus in late 2024 to help alleviate the supply gap, Airbus CEO Guillaume Faury acknowledged that the situation remains “very tight.” Slower deliveries have raised questions about the company's ability to achieve its annual targets, further eroding investor confidence.

Beyond supply chain issues, analysts have also highlighted other challenges, including slower expected earnings before interest and taxes (EBIT) growth in Airbus's Commercial division and a weaker starting point for the Defence and Space segment.

Despite these headwinds, Airbus possesses several strengths. The company's robust order backlog, driven by strong demand for its fuel-efficient A220 and A320neo family aircraft, provides a solid foundation for future growth.

After a ~9% gain year-to-date for the stock, Airbus is once again trading near resistance. A firm break above €170 on strong volume could well set the company up for new heights, although recent analyst views could potentially cause some profit taking at this level.